Current Market Context

Forests continue to play a critical role in the livelihoods of the poor. Over 90 percent of the world's poorest people depend on forests for their livelihoods with more than a billion people living within the 19 forest biodiversity “hotspots”. Policy shifts to recognize traditional and indigenous rights have resulted in a doubling of community-owned and administered forest lands – to 22% of all developing country forests: three times the amount owned by individuals and firms. Current trends indicate that community tenure will double again by 2020 to more than 700 million hectares.

Shifts in domestic and global markets have critical implications for these communities. Global demand for timber and non-timber forest products continues to grow; forests are increasingly valued for their environmental services. In the timber trade, exports of tropical timber are declining, secondary processing is increasing, and domestic consumption in developing countries is booming, particularly in China and India, home to some two-thirds of the world’s forest-dependent poor. At the same time, the global surge of plantation wood – much of it subsidized – is putting pressure on natural forest products, the key asset of the forest-dependent poor, but relatively expensive to produce. There are opportunities: domestic demand for construction grades continues to grow dramatically and prices for higher grades and species continue to climb. Domestic and international trade markets for non-timber forest products continue grow for the pharmaceutical, cosmetic, home and garden industries. Several Latin American countries are promoting ecosystem service markets and eco-labeling of community products.

Promising community and small-producer enterprises have emerged throughout the developing world. In Mexico, 750 communities own timber enterprises. Forest communities in Nepal and India generate more than US $3 billion in economic activity annually. Forest producers in Indonesia and Southeast Asia conserve highly diverse forests in agroforestry systems. These enterprises have had a favorable impact on community incomes, rejuvenated cultural and social processes, built local institutional capacity for self-development, stabilized the resource base and checked deforestation with limited outside investment.

The Challenges

Making markets work for indigenous peoples, communities and small holder producers requires an educated assessment of the trends in the marketplace and a broad vision of the forest as a multi-valued asset, particularly in communities where forests are important for sustaining agriculture and livestock, household needs, and contributing to social and cultural processes. Communities need to be smarter about their comparative advantage, they need to lobby to eliminate regulatory barriers for marketing their products and develop more efficient enterprises and links with established buyers and investors in the private sector.

Forest Trends’ Communities and Markets Program

Forest Trends supports communities and small-scale producers directly and through local partners in Mexico, Central America, Brazil, Peru and China and is conducting assessments of community participation in markets in Mexico, Central America, Brazil, China, and India.

Specifically, our work falls in three categories:

1. Strategic Knowledge on In-Country Market Structures

• Mapping market opportunities for communities in Mexico in light of the rising competition of plantation wood from Chile and Brazil
• Mapping opportunities in Brazil for wood and non-wood products from indigenous reserves and forests settled by diverse groups, focusing on Brazil's distinctive domestic market
• Analyzing wood trade in China and Southeast Asia including the wood flows, demand structure for primary and secondary wood-processed products in China and import trends

2. Catalyzing Connections and Disseminating Knowledge

• Helping communities across Latin America and other regions develop inter-community relationships for learning and within sub regions to group supply and raise efficiency to reach higher-value market segments
• Linking Latin American community wood-enterprises to potential buyers, retailers and exporters, and providing technical assistance and business support
• Facilitating an internet-based community network connecting communities and regional networks across countries and the region
• Helping green enterprises expand, particularly in Mesoamerica, with clear community standards recognized by government, the private sector and the global community

3. Improved Policy and Regulatory Framework for Community Forestry

• Highlighting key policy and market barriers to forest production needing reform (e.g. modifying forest management plans, revisiting permit systems, or recognizing indigenous and smallholder rights to directly harvest timber)
• Encouraging recognition and support to community conservation models and securing community tenure at national and global levels
• Informing national certification initiatives on ways to modify standards to support multiple income streams of community and small-scale enterprises

For more information contact Rebecca Vonada at rvonada@forest-trends.org.

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